Refer to Carroll Clinic's 2011 operating budget contained in Exhibit 8.3, Instead of the actual results reported in Exhibit 8.4, assume the results reported below: Carroll Clinic: New 2011 Results Volume: A. FFS 34,000 visits B. Capitated lives 30,000 members Number of member-months Actual utilization per member-month 0.12 Number of visits 43,200 visits C. Total actual visits 77,200 visits II. Revenues: A.FFS $28 per visit X 34,000 actual visits $ 952,000 B. Capitated lives $ 2.75 PMPM X 360,000 actual member-months $ 990,000 C.Total actual revenues $1,942,000 III. Costs: A. Variable Costs: Labor $1,242,000 (46,000 hours at $27/hour) Supplies 126,000 (90,000 units at $1.40/unit) Total variable costs $ 17.72 ($1,368,000 / 77,200) B. Fixed Costs Overhead, plant, and equipment $525,000 C. Total actual costs $1,893,000 IV. Profit & Loss Statement: Revenues: FFS $952,000 Capitated $990,000 Total $1,942,000 Costs: Variable: FFS $602,487 Capitated 765,513 Total $1,368,000 Contribution Margin $574,000 Fixed Costs 525,000 Actual profit $49,000
a. Construct Carroll s flexible budget for 2011.
b. What are the profit variance, revenue variance, and cost variance?